Uganda Lawmakers to Reach Tullow Deal Soon

KAMPALA (Dow Jones Newswires), Dec. 5, 2011

Key lawmakers in Uganda are confident that a deal will be reached later Monday to enable clearance for the delayed $2.93 billion sale of U.K.-based Tullow's assets in the country.

David Bahati, chairman of the ruling party parliamentary caucus, said lawmakers from the ruling National Resistance Movement party will meet with President Yoweri Museveni later Monday and hope to reach a final position on the matter.

"We hope to reach a conclusion on several issues during today's meeting, and the oil transaction is one of them" Bahati told Dow Jones Newswires.

Museveni held talks with the NRM over the weekend, Ugandan officials said earlier, in an attempt to get them to reverse parliamentary resolutions passed in October to stay the approval of the sale of two thirds of Tullow's stakes three oil blocks to France's Total and China's CNOOC.

"The president briefed on the status of the transaction--he wants parliamentary backing before signing off on the deal," said a lawmaker who attended the weekend meeting.

Museveni wants to speed final approval for the transaction in a bid to restore investors' confidence in the East African nation following a standoff between parliament and executives over the transaction in recent weeks.

Tullow had initially expected to conclude the deal in September, but met with delays due to a row over the inclusion of stabilization clauses in the joint venture oil production agreement and October parliamentary resolutions.

In a special sitting Oct. 11, opposition lawmakers voted to delay the deal, saying the government must first pass all the necessary legislation to regulate the oil sector. The deal is expected to unlock $10 billion worth of investments in the country's oil sector.

Am agreement has since been reached on the stabilization clauses, people familiar with the situation said. However, the parliamentary resolutions that slapped a moratorium on any new deals in the sector continue to be a stumbling block.

Uganda has discovered more than 2.5 billion barrels of oil along its western border with Congo and is expected to start producing oil in the next couple of years.

Copyright (c) 2011 Dow Jones & Company, Inc.


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